Proposition 53K2873

Projet de loi visant à renforcer la protection des utilisateurs de produits et services financiers ainsi que les compétences de l'Autorité des services et marchés financiers, et portant des dispositions diverses (II).

General information ¶

Submitted by

PS | SP the Di Rupo government

Submission date

June 7, 2013

Official page

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Status

Adopted

Requirement

Simple

Subjects

EC Directive bank banking supervision consumer protection civil procedure financial occupation financial legislation investment transaction credit institution legal action speculative capital insurance company

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld MR

Voted to reject

LDD VB

Abstained from voting

∉ N-VA

Party dissidents ¶

• Peter Luykx (CD&V) abstained from voting.

Contact form ¶

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Discussion ¶

July 16, 2013 | Plenary session (Chamber of representatives)

Full source

I refer to the written report.

Mr. Speaker, Mr. Secretary of State, I will start with a positive note. The present draft legislation aims at two objectives: first, to improve the current legal framework and to improve the efficiency of the supervision of the FSMA and, second, to introduce a number of provisions that increase the coherence and transparency of the rules for the protection of customers of financial products and services.

No one can deny that, especially in the banking sector, over the past decades, financial products have been repeatedly mistaken and bringing them to the public. As a result, we ended up in a banking crisis with dramatic consequences for consumers who in good faith bought products whose finality they did not understand.

The Flemish Interest is of course also in favour of effective and effective consumer protection. We support initiatives that contribute to this.

The insurance sector has changed a lot in recent years. There came a deontological code and legal provisions to protect the consumer.

However, before you assume that the Flemish Interest would approve those bills simply, almost “and steamlessly”, we must still make you part of a number of fundamental objections of our group that prevent us from approving those bills. I would like to submit our objections to you.

First, the draft laws precede European directives. One draft refers to insurance intermediation, another to the revision of the MiFID Directive and there is the draft regulation concerning PRIPs, the Packaged Retail Investment Products. These directives are not yet ready. Our first objection is that the current draft legislation is being pursued by Parliament, while the outcome of those directives is far from being determined. In our view, this means the danger that there will be two different regulations. We wonder why these bills will come into force as early as January 1, 2014. While intermediaries in banking and investment services are given a transitional period of more than two years, the present drafts provide for a transitional period of six months.

Mr. Minister, Mr. Secretary of State, do you find that deadline realistic?

and yes.

Yet yet ? I am not. Therefore, we differ in opinions.

There has also been insufficient consultation with the sector on this subject. You have requested written advice on this subject and this has remained. In my opinion, the consultation with the sector is therefore insufficient, while it is still about the employment of tens of thousands of people, as you yourself know.

These draft laws then create legal uncertainty for us. There is no problem with improvements and tightening of supervision, control and other rules in the field of life insurance with a clear investment element. That one must and will work with an improved version of the investor profile can only benefit the customer and investment intermediary, but you have chosen to let those rules of conduct apply to all insurance products. In the definition in the draft laws, all insurance products are housed alongside the financial products. We think that goes too far.

During the committee meeting you understood that at a later date there will be a cleansing and that there will be a split. Our criticism is, therefore, that the bills go far too wide and target all insurance products, even those for which an investor profile could be completely superfluous. I wonder what a fire insurance, a BA Auto and a family BA insurance have to do with an investor profile. For the sake of legal certainty, it would have been much better if you, Mr. Minister, had arranged the correct application of the extension in the law and if you had correctly and correctly approved the scope of application. The expansion will create administrative burdens in the insurance sector. That is already fixed.

During the discussion in the Committee on Economic Affairs, I had the impression that the government has simply transmitted the regulation intended for the banks to the insurance sector, while insurance products have a completely own, specific character. As far as I am concerned, they cannot simply be thrown into a bunch with financial investment products. That is my second fundamental criticism.

I think you also entered the legal uncertainty in a number of articles. To give you a clear example, I would like to refer to the provisions of Article 12sexies, paragraph 2, which stipulates that the person directly engaged in the mediation of insurance contracts must know the essential characteristics of insurance contracts and be able to explain them to the client.

I can agree with the principle itself, but what are those essential characteristics? Where can we find the correct definition of the concept of “essential characteristics”?

However, the consequences of this legal uncertainty can be very serious. The sanction provides for the possibility of deletion from the register of insurance intermediaries. I find it all quite extensive and completely disproportionate.

Fourth, in the preparation of your bills, an impact study is also lacking. Nowhere in the draft legislation we find a reference back to an impact study. However, this could be useful. Insurance is, of course, an important part of the economic and financial life of the modern man, it protects him from all sorts of unforeseen events and employs several tens of thousands of people, not only in the pure insurance companies, but also in the insurance intermediaries and in the banks. Why did you not choose to have an impact study carried out prior to these bills?

My fifth comment is also fundamental. It concerns the presumption of a causal link between the disregard of the rules of conduct and the transaction in question. Article 64 adds a presumption that, in the event of a breach of the rules of conduct by a financial service provider, there is a causal link between that breach and the transaction in question. For me, this deviates from the general rules of liability, which leaves insurance brokers with an even greater responsibility, an exorbitant responsibility, on their shoulders.

In these, in other words, abuses are not only no longer to be excluded, but will become very real and will undermine in insurance intermediaries the motivation to do it all according to the rules of the law. The insurance market again becomes a little less legally secure due to your bills. Why this automatic link between non-compliance with the rules of conduct and a civil sanction?

Do you not find that too extensive?

Have you discussed enough with the industry? In what way did you do that?

I agree with the criticism of mystery shopping and with the questions about the objectivity of its implementation.

What is the cost of mystery shopping? What are the possible consequences for the amount of the subscription right for insurance intermediaries?

I will not approve these bills.

I agree with the objectives of the Twin Peaks II Act. We have seen a lot of ways in the past to deal with the sale of investment insurance to often ignorant consumers. They thought to buy a safe Tak 21 product, and afterwards it turned out to be a Tak 23 product. Explain to people the difference. These washes must definitely belong to the past. We ⁇ support the intentions of this law, but we will abstain.

Despite similar intentions, we differ in opinions about the development due to a fundamentally different way of looking at that sector and those entrepreneurs. For our group, the vast majority of insurance brokers who sell insurance products are self-employed and entrepreneurs who are looking forward to a stable long-term relationship with their customers. This is done on the basis of trust and not on the basis of selling a product. It is a long-term relationship.

Only a minority of these brokers have less good intentions and these must, of course, be tackled hard. We therefore propose to definitely watch the problem rigorously and combat the laundering.

However, we also believe that the FSMA, the financial supervisory authority, has played a proactive role in helping those brokers who are looking for a stable, healthy long-term relationship with their client and do their job with the best intentions.

Proactivity for the FSMA for us implies that brokers can, for example, submit products to the FSMA, which they may possibly proactively screen and stop and that can advise. Screen the products to the source from whom they have been prepared and not just to whom they are selling. Be proactive by, for example, developing tools for creating the investor profile yourself. Be proactive, like FSMA, by giving advice.

Unfortunately, in the committee, the difference in attitude was most pronounced. When we made the proposal for a proactive FSMA, the minister’s response was that what we called a proactive attitude, for him, was fellowship.

Colleagues, I don’t know if you understand exactly what the term “meditating” means. The term “meditating” weighs quite heavy. Insurance brokers are perpetrators. Their clients are victims. The brokers involved should be almost exclusively cowboys and people with bad intentions. I can only regret such an attitude of the Minister of Economy towards people whose vast majority simply does their job with the best intentions. Unfortunately it was not the first time.

From this setting, I regret more than ever that there has been no involvement of the independent brokers. The Professional Federation of Independent Banking and Insurance Brokers was not consulted. Only recently was the High Council for Self-Employed and the SMEs consulted. Such an attitude is ⁇ regrettable. I had hoped to meet a “PIP” here, in particular a Positive Personnel, who has a positive attitude towards the sector and the insurers, who is therefore happy to discuss with them and invite them to hearings. It is ⁇ regrettable.

Let us be clear: on many issues, a much broader debate is essential and necessary. We also reject the practice of the past, in which bonuses or remuneration were granted based on the number of products sold. In this case, as a client, one went to his broker, who looked at his screen and decided that he had to sell another fifteen pieces of a particular product that month in order to have his premium, with the decision that the product in question was proposed as the best product. We know such things from the past; they are very regrettable things that we must fight.

We want to work on this and extend your hand, Mr. Minister. The financial remuneration is at the heart of the broker’s profession and this requires a broad debate for which we reach out to you. Such a thing is not done anywhere behind the scenes through a royal decree taken in the shadow. We have submitted amendments to enable this to take place through a broad debate. I hold these amendments and still count on the support of the PIPs or Positive Persons here in the hall who want to engage in such a debate together with the sector.

It will also take a little more time for this law to enter into force. In the committee you stated that there is no additional administrative burden or paperwork that needs to be put in order. How will brokers demonstrate that they actually have essential product knowledge? I assume that this is done with a certificate from the insurance company that they have completed a training or passed an exam. These papers need to be put in order, but at what time do you see that happen? You argue that the law may enter into force on 1 January, but it seems to me too fast to put the whole paperwork in order.

For the report, I would like to emphasize, and you also stated this at the committee meeting, that when the broker can demonstrate that he has received a certificate from the insurance company, so that he has received a training or passed an examination, the responsibility no longer lies with him. That is very important.

Since there is an almost automatic link between an incorrect purchase and a possible non-compliance with this code of conduct, it is still very important for the broker to know where the responsibility lies.

I want to talk about the timing. Not only the brokers have to put themselves in order, that is still underestimated here too much, the government is not yet in order. This law is linked to a number of royal decrees, royal decrees to prevent brokers from having to create an investment profile for a fire insurance or other damage insurance. The Code of Conduct must still be poured into royal decrees. It all takes time. It would therefore be irresponsible to enforce this law before those royal decrees are ready.

Therefore, I am proposing an amendment to enforce this law only when the necessary royal decrees have been made, if those people at least know what they are doing.

We will refrain from this bill. We are indeed in favor of the goal, it is indeed important that we point out the sector on a number of responsibilities and that the discharges from the past are definitely past time, but we can absolutely not agree with the way.

Mr. Speaker, Mr. Deputy Prime Minister, dear colleagues, five years ago, the PS proposed the creation of a consumer protection agency in the field of financial products, to address very concretely the gap between consumer expectations, on the one hand, and clearly commercial interests of financial institutions, on the other. I am very happy and I will not hide my joy of seeing this bill, which has taken on many claims that the PS proposed five years ago, finally take shape.

The financial crisis has revealed that consumers are often deprived of financial institutions, or even completely ignored by them. What this crisis also showed is that, in that state, no one cared about consumers in financial matters. Today it will be the opposite. The cause, of course, is the complexity of financial products, the lack of information, and often the willingness to prioritize the interests of the bank over those of the customers. On the one hand, there is the banker who holds all the information, on the other, there is the consumer who can only rely on the indications that you want to give him.

Many consumers ignored, and most of all ignored, the nature of the products and the risk they took, and they take. As we have seen, the consequences of this misinformation can be dramatic. Remember those customers who thought they would get a small protected savings, but who, in reality, were at the head, without knowing it, of a very high-risk portfolio.

After five years of sustained efforts to bring about an ambitious reform, we can obviously only rejoice at this important step that parliament is about to take.

Finally, consumers will be better armed against banks, and against insurance companies. Specifically, it is the FSMA that sees its powers and means of action strengthened in the service of the consumer of financial products.

Here are some positive points of the bill - I will not repeat them all. We are strengthening the control of parliament, which is good. The FSMA is a regulator who will be accountable to parliament, and this is important for the role of parliamentarians. Another benefit is the strengthening of regulatory, supervisory and consumer protection powers - a colleague talked about it. Mystery shopping is provided in this law to ensure that banks and insurance companies act honestly and in compliance with MiFID standards in particular. They must act honestly, fairly and professionally towards the consumer by providing clear and non-misleading information.

In my opinion, mystery shopping was a necessity to effectively ensure that employees, bankers and insurers comply with this law.

Strengthening sanctions is an important step forward. I did not believe it, but this advance is found in this bill, Mr. Minister, and it establishes a presumption of causal link between the fault and the damage in the event of non-compliance with a rule of conduct.

Specifically, this means for the consumer that it is now up to the financial service provider to prove that his product was healthy and did not cause harm to the consumer. Combined with mystery shopping, the presumption of causal link will clearly help to curb the cravings of some banks.

I consider these two tools – challenged by some parties – as tools of prevention and deterrence against employees, insurers and bankers.

Strengthening information on financial education is also a preventive measure, as is the extension of MiFID rules to the insurance sector; I have heard the reaction of my colleagues in this regard. Companies and insurance intermediaries will now have the general obligation to act honestly, fairly and professionally, best serving the interests of their clients, and to provide concrete information.

I remind you that insurance companies are not only insurance, they also provide financial products and it was naturally necessary to subject them to the same rules. This will sanitize a sector in which the law of the jungle still reigned, and brokers will have to submit to these rules.

One question remains pending, Mr. Minister, which was mentioned by my colleague Dedecker, and which I myself mentioned during our discussions in committee. But I don’t think you have that responsibility. These are bonuses and bonuses for employees and executives of banks, insurance companies or others. This is a phrase that we - sp.a and PS - obtained as part of the government statement, and I think that would completely complete this bill.

I ask, and we support it at the government level, that the Minister of Finance move forward on this subject, because we know that there is a strong pressure on bank employees to sometimes sell products that do not match customers. It should not be that, tomorrow, the employees become the pigs of the farce.

We therefore support the swift implementation of a bill on this issue of bonuses and bonuses in the context of financial products.

This project complements the new architecture of control of the Belgian financial sector. This is an important step in the interests of the consumer, and a preventive step at the level of the banking world. I thank you.

We voted in the Economy Committee last week on the Twin Peaks 2 bill. Let me return to the very architecture of this ambitious project. This control architecture of the Belgian financial sector has evolved from an integrated control model to a bipolar model, hence the name Twin Peaks.

In this model, the National Bank of Belgium exercises control aimed at preserving the macro- and microeconomic stability of the financial system, while the Financial Services and Markets Authority (FSMA) exercises market surveillance and control of compliance with the rules of conduct that financial intermediaries are obliged to apply in order to ensure the honest, fair and professional treatment of their clients.

This Twin Peaks 2 project aims, above all, to increase consumer protection with regard to financial and insurance products offered by the industry. I think here of the enhanced role of the FSMA that will be able to impose administrative and coercive fines, use mystery shopping (this has already been mentioned several times), request to have access to web pages reserved for customers, access to aggregated data concerning the main complaints filed by customers.

Strengthening consumer protection is of the utmost importance. Allowing the same information, the same degree of security on the information provided by both the banking sector and the insurance sector is also essential. In doing so, the project meets a certain goal of equal treatment for all investment products.

In conclusion, giving FSMA more resources to prevent the distribution of products that pose real risks to consumers is one way to build confidence in these products.

I will therefore be one of those parliamentarians who will scrub the annual report of the FSMA in order to judge the effectiveness of the measures that will be voted today and which my parliamentary group will support.

Mr. Speaker, Mr. Minister, this project is important because it is an indispensable complement to the Twin Peaks reform. I ⁇ ’t say ‘like Janus with two faces’, but one without the other would be a completely incomplete work. It was important that we touched the control, regulation and architecture of the banking sector but that we also watched the other side of the building, the protection of consumers, their perfect information about financial products.

On Monday, in Wall Street, a very special trial has just begun. It concerns Mr. Fabrice Tourre, a former trader at Goldman Sachs, was accused of deceiving investors. This project projects us again into this past where we have known the frenzy of the banking environment and the law of the strongest.

This Mr. Is Torre a stick in a gear, a Turkish head, or a sulfuric character? It is up to the American justice to say it. In any case, what we can see is that five years later, most American business banks had to pay millions of dollars to U.S. regulatory authorities to avoid legal appeals. They escaped there. Only a few traders or a few pedestrian of the chessboard have been under the fires of the news.

This should remind us that we have the obligation, towards our fellow citizens, to ensure that beyond the strengthening of the skills and control of the FSMA, we can have through this a strong and perfectly armed regulator to preserve them.

The obligations of service providers must be in line with the logic of honest, fair and professional action, serving the best interests of customers. That is the meaning of your bill.

This information must be guaranteed and the correct assessment of the investor profile must also be taken into account. This perfect knowledge of the products by the customer in contact with the intermediaries is a priority.

You would like to clarify in the committee, Mr. Minister, that when it comes to financial products, it is insurance and savings products. Certainly, royal decrees will still need to be taken to implement all these arrangements. In any case, I would like to congratulate you on the work done in a reform that was absolutely indispensable.

Mr. Minister, this is a large and very important bill that we were allowed to receive from you.

As a green party, we support 100% the principle of the bill you have presented. We have been a demanding party for a long time. It is the result of the reform of the financial sector following the financial crisis we have experienced, the reform of the supervisory authorities.

I have repeatedly criticized the progress of the reform of the financial sector in our board. We are good at strengthening firefighters and giving teeth, but in some fundamental areas we remain as a green party on our hunger. The separation of banking activities. However, I will not talk about this today.

We believe that consumer protection, and therefore the strengthening of the supervisory authority in order to better meet consumer rights, is a good thing. Especially in times of exploding debt loads, this is extremely necessary. Better information, greater transparency and fairer communication from the financial sector are imperative.

It is a beautiful initiative. We needed clear rules; the supervisor has finally gotten teeth with respect to those who go out of the curve.

I do not have to convince you that it is necessary. Even before the banking crisis broke out, I asked here with colleague Freya Van den Bossche a question about how the MiFID rules were not applied, after many bankers openly in the press had the alarm bell sounded about the way the MiFID regulation was applied.

In short, in fact, cautious investors or investors with a rather cautious profile were stacked with profiles that marked them as “high risk”. Investors who, for example, had a good home-owned share in Fortis were thus placed in the high-risk category. A year later the banking crisis broke out and we all know what happened to Fortis.

The most noticeable thing is the point of mystery shopping. That is a good principle. However, the application of the principle should be evaluated. Someone may get a very clear penalty after one time, or maybe mystery shopping will be needed a few times. Everything depends on case by case.

Mystery shopping is not just about face-to-face advice to a customer, but also about the company culture, answering emails, and so on.

I think it’s good that the text goes wide, but the fact that it goes wide also means that we need to evaluate properly and be careful in the evaluation. So, Mr. Minister, my question is when you could or would like to present a first result of the evaluation to Parliament. This may be an assignment for your successor.

That said, so many years after I asked this question here in the plenary session, the application of the MiFID scheme is still problematic. There is no harmonisation in terms of investor profiles. We also had a debate on this. You are right when you say that depending on the bank you hit and the time you go there, the result may be different. A bread is a bread. What doesn’t interest me – it’s an image I got from your colleague Tuybens – is its taste, but rather the food safety. I am interested in how much that bread poses a great risk or no risk to the health of the person who eats it. The same goes for the MiFID system. You will never get the same result for 100%. You have said it yourself. Mathematically this is not possible. However, it should not be possible for one bank to be labeled as high risk and for the other as a very cautious investor. Unfortunately, this is still the case today. This is still problematic.

The very large draft, which quickly passes through the Parliament and whose principles we fully endorse, provides for a great transfer of powers to the King.

Soon it will be King Philip. The remuneration policy is kept away from the parliamentary debate and I find it very extensive, especially since everything related to these topics has always been chased or held away from parliamentary debate in recent years, since the financial crisis broke out. I find this ⁇ regrettable, because this right now, in these times, deserves a fundamental parliamentary debate.

Mr. Minister, the comment I make is not only applicable to you, but it is a tendency within the current majority not to discuss important aspects of the discussion with the Parliament and the Parliament even often pass on it.

There has been a debate about whether or not to engage in consultation with the stakeholders. Knowledge by the industry is not the same as participation. I have already said this in Antwerp a few times, and although the equation may not be complete, the statement is true. Therefore, I would like to make a call in this regard. Given the pace and scale of the design, I would like to call for a sound evaluation, one year after it entered into force. That evaluation should then include, for example, the position of the independent brokers and the comments they have made. I think it is good to make good arrangements in advance and then evaluate properly, so that we get as much clarity and transparency as possible.

One concern I expressed at the committee meeting – not only myself, but also Mrs. Lalieux – concerns the relationship between employees, employees in an institution or organization, and employers. You have stated that an operator will never be held liable unless he applies the MiFID rules correctly. I have already pointed out in my introduction that this issue is still problematic and that there is also some corporate pressure.

It does not exist only in the form of bonuses, as Ms. Lalieux has referred to. Our colleague Philippe Lamberts has done very extensive work on this in the European Parliament. Our group has submitted several proposals in this panel and we have really gone a long way in this. I agree with Mrs. Lalieux’s observation that any progress would be desirable.

In addition to pushing in a positive sense through bonuses, there is also pressure in a negative way through penalties and reaching targets. There it becomes confusing, because what does the employee who does not ⁇ the targets imposed on him and knows that the ham hangs over his head? What does the employee who is faced with a permanent communication about competitiveness, competitiveness, competitiveness? That employee feels convinced to deal with the MiFID directive a little differently, while, as you say, it’s not about a matter of taste – bread can taste anywhere else – but about a basic debate about food safety. That debate is still needed, and this was stated by Mrs. Lalieux in the committee with me.

The same applies to the debate about questionable products: when is there a moratorium and when is it a questionable product? You have rightly said that we should not take the responsibility out of our hands. I share that point of view. In recent years, the link between the top of the financial sector and the regulators may have been problematic, but now we need to clearly separate everything. Black is black and white is white, you said. An adequate arbitration between mess and a questionable product is ⁇ important for the FSMA. This should not immediately be discarded as co-sponsoring: when one calls something a questionable product and yet permits it, then a form of communication about it is good, even if it is just to indicate a citizen who arrives on the FSMA’s website which products are actually permitted, though with an outcry sign next to it to still stay alert.

I have made a number of frames that do not disrupt the basic conditions of this design. We stand behind and continue to do so. However, we call on the government to work from the ground up of the problem, in particular the reform of the financial sector. Thus, these products are no longer spent and one will no longer want to take that great risk in exchange for quick profits. This is the best protection for consumers. We will approve this draft today, but we ask you for a sound assessment of this draft and ask you to work swiftly on the fundamental reform of the financial sector.

Mr. Speaker, dear colleagues, I have said in the committee that the timing will always be sharp, but at some point one must say where one stands. It was known for a long time that this would happen, but it was not always believed. However, that is not my problem.

Mr. Dedecker talked about meditating. This terminology is not the right one for me. I do not want to link criminal connotations or insinuations to this. In my opinion, too many questions about proactivity and FSMA agreements lead to responsibilization. That is a better term than “co-editor”. This will be discussed in the public debate. That terminology is not the best, and I take my responsibility for it.

I emphasize that there are still many misunderstandings about the term “la sanction civile”.

With regard to the civil sanction, it is evident that proof of guilt must be provided. It is important to have a causal link. It was necessary to make a provision on this subject.

Regarding remuneration in the financial sector, I can assure you that the Minister of Finance and groups are working on it. Projects are under development. We are discussing this at the government level. The work is progressing well.

I repeat that it is up to the next assembly to do the evaluation. One must do that. You may consider this as a call from mine because of the following MPs to evaluate the law in time and, if necessary, update it.

Mr. Minister, thank you for your correction.